Thursday, May 15, 2014

A Sort Squeeze For Zynga (NASDAQ: ZNGA) ?

I love buying beaten-down stocks with big upside potential, particularly when short interest is high. As the number of outstanding shares held short climbs, signaling increasingly bearish sentiment, the potential for a short squeeze increases.
A short squeeze is a rapid move higher in a heavily shorted stock. As price rises, more and more short sellers are forced to cover their positions by buying shares on the market, thus pushing the stock even higher. It's a vicious cycle, and getting caught on the wrong side of a short squeeze can result in substantial losses.
However, screening for potential short squeeze candidates can also lead to high-probability, short-term bullish trades. And mobile and social game maker Zynga (NASDAQ: ZNGA) currently looks ripe for a short squeeze.  (more)

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